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More Republican-leaning states are opting to partner with the federal government to create an online marketplace known as an exchange as a key deadline approaches Friday (Feb. 15). The action by six states to partner with the federal government, plus an additional six states anticipated to partner with the federal government on exchanges, is a sign of progress in providing health coverage to the uninsured, an analysis by Avalere Health shows. (Photo credit: Wikipedia)

As President Obama prepares to address the nation in his State of the Union address that is expected to include an update on the Affordable Care Act, more Republican leaning states are opting to partner with his administration to provide health insurance benefits to their residents under the health law.

The movement by states to partner with the federal government to create an online marketplace known as an exchange comes as a deadline approaches Friday (Feb. 15). The action by six states to partner with the federal government, plus an additional six states anticipated to partner with the federal government on exchanges, is outlined in a new analysis linked here

by Avalere Health, a research and advisory services firm on health policy issues that is tracking development of the exchanges.

“Things are gelling nicely,” said Dan Mendelson, chief executive officer of Avalere Health. “It’s now clear that the exchanges will be up and running in 50 states.”

The decisions by the states are critical to expansion of health benefits to uninsured individuals and small businesses that don’t qualify for Medicaid insurance for the poor yet still find the cost of private coverage out of reach.

Most major health insurance companies that sell individual and small group policies such as Aetna (AET), Humana (HUM), UnitedHealth Group (UNH), Cigna (CI) and most Blue Cross plans are planning to offer health plans on the exchanges, which will be operational in January of 2014. At that time, millions of Americans, including those who have no coverage now will receive federal subsidies of about $5,000 to help them buy coverage.

If states opt against operating their own exchanges, the federal government will operate the exchange. States can also operate an exchange jointly with the federal government.

Avalere said Illinois, Arkansas, Delaware, Iowa, Michigan and South Dakota have already agreed to form partnerships with the federal government to create an exchange while the firm says that Ohio, Mississippi, New Jersey, New Hampshire, Tennessee and West Virginia “are likely to partner with the federal government in 2014 and several other states could change their status before the Friday deadline,” Avalere said in a statement.

Though there are 16 states allowing the federal government to run their exchange and likely five more, analysts believe most states – including those in partnerships with the federal government - will eventually want to run their own exchanges.

“Those states that have chosen to run their own exchanges have the benefit of more consistency with their Medicaid offerings – which is important since so many of those accessing insurance under the exchange are low income,” Mendelson said.

“It’s likely that more states will gravitate towards that arrangement in the future,” he added. “Introducing new healthcare programs is never perfectly smooth, and we will likely see some glitches when the exchanges come up. But nothing that can’t be fixed.”